Dealing with China(Archive)

China remains a vexing and complicated issue for concerned investors. At Trillium Asset Management, the investment advisor that publishes Investing For a Better World, we continue to research how corporations affect human rights through their operations in China and Tibet. Whether corporations lobby on behalf of Beijing, contract with sweatshops in Shanghai, finance the Three Gorges Dam on the Yangtze, or extract raw materials from Tibet, Trillium Asset Management is active in holding corporations accountable. Recently, we endorsed a new set of principles for corporations that do business in China. We have also taken the lead in facilitating the development of a code of conduct for companies that operate in Tibet.
On May 26, 1999 the International Labor Rights Fund (ILRF) and Global Exchange launched a campaign to promote a set of “US Business Principles for Human Rights of Workers in China.” Trillium Asset Management joined the campaign in conjunction with Human Rights in China, Amnesty International USA, Lawyers’ Committee for Human Rights, and a number of other prominent organizations active in the fields of human rights, sweatshops, consumer rights and socially responsible investment. Three companies have already announced that they will sign these new principles: Levi Strauss & Co., Mattel and Reebok.
The idea of human rights principles for American companies in China is not new. It first appeared in 1991 as a US Congressional resolution introduced by Rep. John Miller, a Democrat from Washington but Congress has never enacted legislation on this issue.
A number of human rights organizations and the Clinton Administration have also attempted to develop a voluntary code of conduct. Starting in 1992, the International League for Human Rights and later Human Rights Watch set out key human rights standards for companies in China and urged companies to report on their compliance with those standards. In 1994, in the wake of detaching human rights conditions from the renewal of China’s Most Favored Nation trading status, the Clinton Administration announced that it would develop its own US Business Principles for China. However, under pressure from US corporations nervous about angering China, the Administration abandoned its China-specific approach and issued a watered-down set of “Model Business Principles” for US operations overseas.
The new “US Business Principles for Human Rights of Workers in China” builds on these past initiatives. The principles are based on existing obligations under Chinese law and international covenants regarding issues such as prison camp labor, wages that meet basic needs, and freedom of association. Discussion is already underway with companies concerning the implementation and independent monitoring of the principles. In July, Trillium Asset Management set up a conference call to help improve coordination between proponents of the new China principles and members of the Interfaith Center on Corporate Responsibility active on China.
These new China principles also serve as a foundation for a similar initiative regarding Tibet. For over a year, we have helped organize a working group to develop a code of conduct for companies that operate in Tibet. This initiative includes organizations such as the International Campaign for Tibet, the International Committee of Lawyers for Tibet, and the Milarepa Fund. The group plans to finish the code before the end of the year.
Holding corporations accountable for their conduct in China and Tibet is a tough puzzle. But these initiatives show that it is one that can be cracked.